After a standard debriefing with the IRS, Lockheed Martin ruled against filing an appeal for an internal IRS review of the decision.

"We're not going to protest it," said Judith Gan, spokeswoman for the Bethesda, Maryland-based aerospace and defense giant. "We were satisfied with the explanation we received."

Work on the huge IRS modernization project is expected to start in January. CSC, the third-largest U.S. provider of computer consulting and maintenance services, will work with
its team to improve the IRS's customer phone and Internet-based service, provide faster access to tax forms, expand electronic tax filing capabilities, and install faster and more secure workstations.

Analysts say the contract, which sent CSC's stock soaring earlier this month, could be worth as much as $5 billion to $10 billion over its duration. The
IRS has not disclosed the exact value of the deal.

In the meantime, Lockheed Martin today said it expects fourth-quarter earnings per share will fall 10 percent due to delays in space launches and aircraft deliveries. That would put earnings at about 1.61 per share, well below analyst expectations of 2.06.

In response to the news, the company's stock fell 8 to 87 per share in trading this afternoon.